ISSUE #1: Retail customer choice agenda and schedule

The MPSC Staff Report wisely speeds up the Jobs Commissions direct access
deployment schedule by demanding that a much greater amount of new load be available to
customers on a competitive basis. Starting this year, Michigan utilities would be required
to make at least 2.5 percent of their load available for direct access competition. For
Detroit Edison and Consumers Energy Company, this would equal 225MW and 150MW blocks of
load, respectively. Finally, under the original MPSC draft plan, by 2001, all commercial
and industrial customers would be given full competitive access while residential
customers would be phased in at a rate of 2.5 percent per year. By 2004, all residential
customers would be guaranteed choice as well.

Although the direct access schedule contained in the original MPSC Staff Report is a
clear improvement over the much less ambitious Jobs Commission report, it still fails to
take these crucial steps rapidly enough. There is simply no reason to delay the immediate
transition to competition for all customers. Denying residential customers full
competitive choice while industrial and commercial users enjoy the fruits of competition
will lead to calls of an uneven playing field or corporate favoritism. As Michigan
Attorney General Frank Kelley aptly argued in testimony before the MPSC on January 14:

"I am dismayed that the plan continues to contain a divisive dichotomy between
business customers and residential customers. . . . I cannot support a plan that does not
permit all customers to have equal access to power suppliers. Commercial and industrial
customers must not be permitted to lock up available low-cost power from 2001 to 2004,
leaving only higher priced power for residential customers. The goal of restructuring must
be to bring the benefits of a competitive generation market to all customers, not just a
few." 19

Luckily, when the Commission handed down its final Opinion and Order on June 5, part of
this problem had been corrected. The Commission conceded that asymmetrical treatment of
customers would be unfair, and therefore, the phase-in schedule for direct access will now
apply to all customer classes equally.

Unfortunately, however, the gradual phase-in itself remains unaltered. The Commission
apparently remains committed to a staggered transition to full customer choice. This is
unfortunate and unnecessary. All customers could be granted choice much earlier than the
Commissions planned timetable allows. Indeed, if Michigan policy makers want to
remain in line with, or ahead of, the timetables established by other states, this
timetable must be accelerated so that all customer classes are guaranteed choice long
before the current 2002 date set by the Commission.